Crypto Mining Held Responsible For Power Outages In Irkutsk, Russia

• Irkutsk is the largest city of Irkutsk Oblast in Russia, which has been facing constant outages since December 2021 and has held crypto mining responsible.

• The IESC, through its calculations, has shown that the consumption has escalated about 108%, and the mining activities that individuals host at their apartments and garages are majorly responsible for this.

• A power company of Irkutskenergo has filed lawsuits against 80 responsible entities involved in gray mining and has already won nine cases so far.

The power grid operators are facing an increasing number of outages in Irkutsk. The city has claimed that it has been facing a substantial increase in electricity consumption, which has been overloading the distribution network. The officials from the region have accused the crypto miners that are mining cryptocurrencies from their garages, apartments, and basements. Some measures have been proposed to address the challenge and find a way out of this situation, which will worsen over time. The responsible authorities have decided to increase the capacity in Irkutsk Oblast for the distribution network.

As reported by the Russian daily newspaper, Kommersant, some of the other measures to prevent outages include authorities’ decision to set up particular platforms for hosting mining activities and bring higher tariffs for cryptocurrency miners. The reports also highlighted that there had been a severe increase of pressure over the grid in some residential areas since June last year, and in December 2021, several emergencies or planned outages were observed in many areas of Irkutsk.

Power Consumption Escalates By 108%

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The calculations done by the IESC (Irkutsk Electric Grid Company) have revealed that the consumption of electricity in Irkutsk has increased by 108% for the complete 2021. The IESC explained that “despite the warm weather in November, the load increased by almost 40% compared to last year. The significant loads on the power networks and the growing number of outages are associated with the activities of miners.”

The IESC also said that since the equipment involved in mining cryptocurrencies works 24-7, it becomes a cumbersome energy consumption operation. The load these mining activities create on electric networks isn’t a good sign, as engineers warn that they weren’t meant to handle such load. Increasing mining activities and outages have also forced IESC to temporarily shut supply in several areas to install high-capacity power lines and replace fuses.

Tracking Responsible Entities

The regional authorities have constantly been making efforts to track mining sources that have been responsible for this spike in consumption. A Russian power company that focuses on generating hydroelectricity, Irkutskenergo, said that “in Irkutsk, 21 electrical installations suspected of cryptocurrency mining were identified… Mining equipment is installed on balconies, in residential premises and basements of apartment buildings.”

In 2021, the responsible authorities, in raids, discovered over 1,100 cases of gray mining in Irkutsk Oblast. As per reports, Irkutskenergosbyt has filed over 80 lawsuits against individuals related to crypto mining, and the claims are estimated at $980,000, i.e., 73.3 million rubles. The power company has won about 9 cases to date, from which the company is expected to get $250,000, i.e., 18.7 million rubles in compensation.

Planning Regulations For the Sector

Irkutsk has been entitled as Russia’s mining capital with the lowest rates all over the country, being $0.01 (0.86 rubles) per kWh, even though tariff is six times more in Russia. A group working at the State Duma, the lower house of the Federal Assembly of Russia, has been discussing regulation proposals for the crypto mining sector and other crypto-concerned activities.